Winning over reluctant suppliers

Friday, 30 September 2011 | By Michelle Hammond

Start-ups have been known to try every trick in the book to win over sceptical suppliers but when you’re barely out of uni you don’t necessarily have the right skills or experience to draw on let alone a good reputation.

That was the predicament of Wai Hong Fong when he launched his business at the age of 21.

In addition to being StartupSmart’s resident SEO expert Fong is the founder of OZHut, a top destination site for lifestyle and leisure products, which took in $1.8 million last year.

Originally from Malaysia, Fong began his entrepreneurial journey as an international student at the University of Melbourne.

“Immediately after graduating the opportunity to start a business was presented alongside a secure job offer,” Fong says.

“I don’t actually know what came over me at that time, not having any prior working or business experience. In fact business was a very foreign concept in our family.”

But Fong says his inner geek won out.

“Having the Midas touch with all things written in binary code and an entrepreneurial spirit – albeit young and lacking in wisdom – gave me just enough confidence to reject the job offer and start OZHut,” he says.

“I partnered with an uncle who had a strong background in traditional retail and was an IT consultant by trade. He put in some initial capital and I gave up a year’s wage to get the ball rolling.”

Fong appreciated the support of his uncle but he struggled to make headway with suppliers, not only due to his lack of experience but also due to the nature of the market.

“We ran into a lot of trouble sourcing suppliers back in 2007, when online retail still carried connotations of mum-and-dad stores operating from their living room,” he says.

“We strolled the aisles of all the trade shows we could get to and eventually settled on a few niches. We started out in dancing shoes, ladies boots, telescopes, watches and gadgets – pretty much whatever we could get our hands on.”

The biggest challenge Fong faced was convincing people that he could sell their products.

“As a small player we had no big names to throw around and neither did we have a lot of cash. As such, stronger brand name suppliers were highly reluctant to provide us with anything at all,” he says.

“However we learnt that if we got on board some of the smaller suppliers and built up some traffic by leveraging their products we could rope in the other big suppliers one at a time.”

Once the business had secured a major client Fong says it was a lot easier to convince others to follow suit.

“The biggest lesson learnt in this was definitely not to be discouraged by being turned down and to not despise humble beginnings,” he says.

“Eventually all that needs to happen is one small piece after another coming together and soon the bigger chunks of the puzzle will want to join the party.”

In light of that experience Fong now views his business in a very different way.

“Business has been viewed as a profit-making machine. While profit is an important part of a business objective I’ve come to see that originally businesses are here to serve the community,” he says.

“We’ve revised many of our business measures to reflect that. Instead of measuring how quickly a customer service staff member can complete a call we measure how ‘wowed’ a customer is at the end of a phone call without measuring the duration of the call itself.”

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